Licious hits $100 million in annual revenue run rate

Vivek Gupta (L) and Abhay Hanjura (R), co-founders, Licious

Temasek-backed Licious, a meat delivery startup, has achieved an annual revenue run rate of $100 million, or around Rs 850 crore, founders Vivek Gupta and Abhay Hanjura told Moneycontrol in an interview. That translates to a monthly revenue of Rs 70-72 crore, which is about an 18 percent increase from Rs 60 crore recorded a year back.

Annual revenue run rate is a metric used to calculate revenue based on current earnings by multiplying the monthly revenue into 12. The calculation also assumes a company will grow at the same pace in the coming months.

The 18 percent increase comes months after Moneycontrol reported that Licious had seen its monthly revenue stagnate in the Rs 62-68 crore range during the first few months of FY24. The flatlining revenue was after the company’s top line jumped 64 percent from Rs 430 crore in FY21 to Rs 706 crore in FY22 . Licious however couldn’t keep the same momentum going, largely because of a Covid-induced slowdown. As a result, Licious ended FY23 with a revenue of Rs 746 crore, less than half of Rs 1,500 crore that it had initially projected.

To be sure, the Rs 850 crore amount is Licious' annual revenue run rate and not the final FY24 revenue. Licious is still in the process of closing its books of accounts for FY24.

Gupta and Hanjura however said the company’s scale improved in FY24 on the back of lower wastages (down from 6 percent to 3.5 percent year-on-year), increased focus on profitable units and better control over costs. The company’s gross margin has improved from -5 percent to 30 percent in about 18 months.

“Our company’s financial health is stronger than ever as we’re prioritising green shoots and canning unprofitable growth. That has enabled us to make decisions from a place of strength. We are now targeting EBITDA profitability by March 2025,” Gupta told Moneycontrol.

The Bengaluru-based company has also managed to reduce its monthly cash burn to around Rs 12 crore (about $1.5 million), Gupta added. Moneycontrol had previously reported that Licious wa;s burning about Rs 22-26 crore each month. Better utilisation (an increase from 51 percent to 78 percent), more repeat purchases and one round of layoffs are a few factors that helped the company lower its burn.

Licious fact sheet

Room for growth

Licious however believes it has only scratched the surface so far and still has plenty of wiggle room. The total addressable market (TAM) for meat companies is around 30 million households and Licious has tapped only 4 million so far. India, as a meat consuming country, is yet to mature, Hanjura explained.

On the average, a meat consumer in India only eats 30 grams of meat in a day which is far below the global benchmark of about 150 grams. People in advanced economies, such as the US, consume 300 grams of meat per person per day. “There is still a lot to be done in India and we’re building Licious with a long-term vision,” Hanjura added.

With an intention to grow, Licious plans to focus on the top 20 cities in India, including Kolkata and Chennai, where it is yet to build a loyal customer base. The company is also diversifying its offerings by entering into newer categories like momos and the like which will also push up average order values (AOVs).

Licious currently has an AOV of around Rs 600, up from Rs 500 from 3-4 years ago, Gupta told Moneycontrol.

Gupta and Hanjura are also building their own ready-to-eat category, where they will sell curries, pastes and the like which can be consumed as an add-on during meat purchases.  At the same time, Licious will open 4-5 offline stores by the end of June and further increase that count to around 40 stores by the end of the current fiscal.

It costs about Rs 40 lakh to set up one store as per Gupta’s estimates but Licious is well capitalised and won’t need to raise funds in the near future. “We have $100 million in the bank and will need to do only a pre-IPO round sometime in 2026,” a confident Gupta said.

Founded by Gupta and Hanjura in 2015, Licious has grown fast and is the highest-funded company in the fresh animal protein business category. The company has raised about $490 million from Vertex Ventures, Bertelsmann India Investments, 3one4 Capital and several others. The Kamath brothers, Boat’s Aman Gupta and others are the prominent angel investors at Licious, which was last valued at $1.5 billion when it raised $150 million in March last year, as per Tracxn, a private markets data provider.

Apart from local butchers, Licious primarily competes with Amazon-backed FreshToHome which has raised about $290 million so far.